. is a division emerging among creditors? we will try to answer. interesting action developing. ftse up by 40. they are playing catch-up. futures lower across the board. dax is down. i look to shanghai, the shanghai composite it is lower. the yield in spain and italy a touch higher. let's go to the market open with caroline hyde. caroline: that from holiday you are looking at japan, south korea, and thailand all continue to be closed. asia trading lower. following suit in asia. ftse is up 0.8%. we saw equity markets yesterday the ftse 100 playing a bit of catch-up or your friends is coming off the high yesterday. 0.2%.

greece is in the forefront of everybody's mind for it it seems it will make the 200 million payment and then what? in terms of the agreement and labor laws and pensions will they actually have to default or exit? we had george magnus saying this time next year he feels greece will be potentially moving toward the exit of europe . we are going to get a short do over at kicking the can down the road. italy up by 0.4% today. we had market action over in australia. target's reaction to the central bank cut once again a record low rate for australia. it seems a slowdown in china continued to hurt in terms of the job. australian dollar is pushing higher after the rate lower to 2% up by 0.25%. most economists we spoke with 25

of 29 without we would get to the second cut this year by australia trying to stimulate its economy. the aussie dollar goes higher. we had papadavid who is confused by some of the currencies earlier. meanwhile, a norwegian bank could indeed move as well. according to what the euro is doing, coming down by half a percentage point a doesn't the dollar. we get trade and services. -- a percentage point against the dollar. we get the labor data. nonfarm payrolls. a quick check on some of the stocks. you had ubs' earnings. how is that reacting? 4.5%, smashing estimates. profitability of 88%. investment banking ramping up.

14 billion going in in terms of extra money to manage. adidas is seeing a strong start to the year. reebok is doing well and add idas. the only area of concern is golfing. sales are up 17% helped by euro weakness. aberdeen up by 0.4%. we spoke to the chief it's a different earlier and seems to be about the move of the exit of emerging markets. people not wanting to be in the emerging markets. next outflows and next sales pretty strong indeed pretty strong indeed. back to you. jonathan: thank you. the ftse 100 playing catch-up after the data -- day off yesterday. breaking economic data. spanish jobless claims fall by almost 120,000.

the survey was a drop of 65,000. more decent, good news. much further south toward australia. new lows for the rba. the reserve bank have cut interest rate to a fresh record low according to a weaker outlook. the nation trying to discourage stronger weakening of the currency. that does not seem to be working. let's get out da ton -- let's get out to dan petri. you cut rates at the currency weakens a guest not happening this morning, what is the read across? dan: you think it is party time. -- currency weakness and that is not happening this morning, what is the read across? dan: wednesday cut to the rate it was expected, it was pretty strong. we saw people going down in

anticipation and they fought it, they are saying that is it for the rba the rba and no more rate cut in the pipeline. it was very different. that was driving that decision the fact that the statement indicated it was not really any more for rate cuts. the aussie dollar went up. why didn't go up? you have to look at 2%. that is pathetic, one of the best counterparts. the kiwi bank. the aussie is really one of the few places where you can get the return of money. look at the ecb and the fed who are dragging the proverbial chain here. times are a bit frustrating that in the federal reserve is not lifting rates there. that is the number one story. and the was in printable story

of record on your o -- iron ore does not have the same luster as it did before. all but cemented the move by the central bank. jennifer: another side -- jonathan: another side to the story and property market. a subject close to your heart for you we obsess over london property prices. sydney did dinner parties and the same topic area a lot of people thought they may hold back because of the housing sector. can they pull the trigger now? dan petrie: well they are now being urged to do that. the dinner parties you talk about a you talk about these things. they have barbecues and australia which we call barbecue stoppers. [laughter] dan petrie: same result. popping the cans off a few more

beers and getting stuck into the policy details. those areas really in the central bank, you have a situation where the property prices in sydney are going up. you see where it is hollowing out a you are paying almost $1 million for very average homes. over many years ago, i bid on a very average house and it would have meant a commute and is probably worth several million dollars. the fact of the matter is there is a problem. the housing industry in australia is shy of 40000 and a situation where not just sydney and melbourne has done well building properties. they have a problem with houses, it is the holy grail. the believe house prices will go

up further. the news is concerning. i will give you an example. on of the weekend, sydney rates were 90%. not just a couple of people gathering outside of a house having a barbecue, hundreds of people prepared to pay $200,000 in u.s. so it is an issue. jonathan: dan petrie killing the london dinner party. thank you for joining us. we are joined by a member of the investment committee. he helps oversee about 50 billion euros in assets. great to have you with us. australia is a classic example of a slowdown and overheating. 2%, is that the really the slow down? guest: i do not think so. sovereign bonds and there are further easing.

the experience we have seen in europe and in particular in sweden and to a less extent in the u.k. it showing a lot of the central banks are trying to access regulation rather than by hitting a relatively tight monetary policy. jonathan: the aussie dollar has done a lot of damage. externally china, that is behind plunging iron ore prices. top are down almost 4%. let's be clear. 12 month rally. chinese equities right now is how bullish are you? jean medecin: we are invested in chinese liquidity's a good drivers of our performance. we are very lucid about the reason behind this release and we do not want to be involved in one of these investors which

seems to be short term and also a pullback in benchmarks and investing if you want. quite a lot interesting ideas in china. the media is a well -- web producer. a lot of interesting ideas in china but it is warranted. if you are trying to catch it is big momentum trade, it could be painful longer-term. jonathan: i want to wrap this up quickly. equity markets and the runner they have had. we look at china and we are dying nervously because of the end of that market and the s&p 500. i bring one of your charts. i am sure you have seen many times. without their markets top. given the amount of stimulus we have seen in the first three or four months of this year globally might we see a recession before significant

tightening? jean medecin: we are still in moderate growth and sustainable moderate growth. it is probably helping. we do not anticipate the kind of triggering market fallout. where people should not be complacent is inflation. we should have some kind of stabilization and inflation before the end. that is before central banks to reassess a little bit of the policy. this is where may be there is -- maybe to looking your global strategy. jonathan: interesting implications for you we will do that later. jean medecin is going to stay with us. about 11 minutes into the session. the ftse 100 is pushing higher. a rally across euro. the ftse 100 is up by 37 points.

dax is down. the shanghai composite up at 110%. we come back for perspective. on of the show, a group known as the troyker. ubs crushing estimates. a little bit later, an exclusive conversation with exotica. -- luxottica. little bit later. join us and we are back in 2. ♪

jonathan: we have not talked about greece. here it is. the country is far from agreement with international creditor and faces a 200 million euro payment to the imf tomorrow. we are joined by nikos. what are you watching out for? are they going to have the money> nikos: yes, greek officials say they have the money a truly the clock is ticking. the greek finance ministers should be meeting with his french counterpart as we speak and later in the day he will meet with the commissioner. the important really important meeting of the day is the wine

and that is going to take place later this afternoon. it is between the deputy prime minister and the ecb president mario draghi. the governing council of the ecb and they are set to approve additional emergency cash for greek banks. but they may also discuss raising the haircut they apply on the collateral that the banks pledged in exchange for this emergency cash. if they do raise the haircut, it would mean that this emergency liquidity assistance lifeline would be number and it would set the clock ticking for capital control. it will be the really important meeting of the day. jonathan: the finances and let's talk about if these sites can play nice. the interesting development has been reports on the creditor's side, a division emerging. what do we know about that?

nikos chrysoloras: the imf has always been a hardliner in negotiations and have implicated that degrees needs another round. but obviously they argue for restructuring on other people's lo and notans what the imf has given. one of the important sticking points in the conversation is that greece's suggestions of measures in order to meet the budget targets this year are based on really optimistic assumptions and the european commission, for example, is set to go from today. the greek government said it economy will grow by 1.4% this year even though it is in a recession as we speak. if an economy does not grow as much as the greek government expects, it means it is revenue

for this year will be lower and the deficit as a percentage of gdp will be lower. it really changes the growth rate and the game. jonathan: nikos chrysoloras great to have you with us. so many things going on. the athens bureau chief joining us live. jean medecin is still with us. jean i want to rip up the greece news and get on with the bond market. we have seen phenomenal moves in europe. on the periphery as well. how are you guys positioned on the periphery? dan petrie -- jean medecin: what to the ecb has done is fragmentation. being exposed to the sovereign bond on the periphery and an area where web and gradually taking profit and things we did. the rationale is the ecb is going to be successful in recurring expectations.

it makes no sense for the booming to trade at the level just a few weeks ago. jonathan: let's talk about timing. i do not hold them. i am actively going short. when did you go short? jean medecin: we did that a few weeks ago in anticipation of the program. it was a reflation trade. you are absolutely right that the timing is absolutely critical and that is why you need to have conviction and the courage. beyond timing, the fundamentals when there is a low valuation where you feel comfortable buying or selling something, you should stick to it. jonathan: over the past 2 weeks a rally in the eurozone. the move looks like that. we'll go down to 0.04 percent. directed is rebound is really --

whether this rebound is the beginning of the reflation trade or if it is a short-term correction, what do you think it is? jean medecin: when you look at how rapid, a little bit of both. the fundamental picture is sustaining the positioning on being short and some technicals which are also playing. as you know we are suffering in europe for our relation which is forcing additional investors like pension funds to be particular. they are forced to buy more and more. for liability management and we are in sovereign. where you need to be careful and the momentum is adding up to the point where there is an inflation point. jonathan: when you see yields going down and italian and

portuguese and almost all of those going down? is it a spread play or european blanketed eurozone income play? jean medecin: there is an element of being short on the european eurozone area. and a little bit of a spread play. for example, the difference between sweden and germany and you know sweden's government and the central-bank have tried to -- the play between sweden and germany which has similar characteristics. where you have a big gap between the german rates. in order to some old of the volatility in your portfolio and you need to put it in a context. an otherwise you are going to try and catch up with the trend at that's probably going to be painful. jonathan: jean, stay with us. profits doubling at ubs.

manus cranny joins us. very busy morning for us. the stock on my screen and the market likes the number. manus: it does. a story of lower-cost and stronger trading and rebounding. for 2 billion swiss francs. -- 14 billion swiss francs. the best since -- the money coming from europe and asia and profitability of 82% -- up 82%. rejuvenated and revamped weather turning over inventory quickly is a critical point responding to customers' needs. the statement is operating and i know you like this which is one the bloomberg intelligence trading of 23%. so much for the u.s. peers. credit suisse are in a dust

quite literally at 6.4%. this rebound in investment banking is delivering the profitability of 82%. capital building capital and overall reserve for litigation at 6.2 billion. are you and to the top of ripping the cost out of the business? good news on all fronts of the business. the jonathan: manus cranny of dating on the big word that starts with r "risk." what is next? manus: you bring in new money that is not that profitable. and i caught up with somebody earlier who told me the are making the point they are rather more discerning. there are risks with the acid of

the and nobody has a crystal ball. negative rates are here to say -- stay. the biggest risk is global growth. >> the biggest risk will be a new global slow down in terms of growth. we certainly have the business that is procyclical to gdp and the environment we are in if we continue to have a reasonable recovery and that will lead central banks to get to a normalized rate environment. that is what everybody whether you talk to a cfo in banking or insurance and we say we would like to see it move back to first lesson that positive rates and a positive rate. hopefully the fed will be starting the process. manus: the chief cfo speaking to me this morning. this is a clean sweep. this is delivery from a strategy

that was in demand over with management. back to you. jennifer: manus always have good a good time in zurich. final thoughts from jean medecin .jean, we talked about the bull market and i want to tell by european equities. what is the big play? m&a them&a -- in the m&a trade? jean medecin: i think m&a trade is big. not in the fragmentation and we had a little pmi. it was up for germany and down for france. maybe by some companies where it is a cyclical pick up in europe and you will benefit. do not need a cyclical pick up to make an interesting investment story. you have the savings in this

merger and i inc. -- think that is a real right now. jonathan: even though you missed out with some of the equities on the m&a side and guessing that is difficult. jean medecin: i am not much for calling m&a baltimore for equity spaces and financial markets because of this built up liquidity and she financing which is -- and chief financing which is supporting. we have also a market which is attracting a lot of interesting ideals and we are one of the largest shareholders. just a lot of compelling stories where you can make money out of the stories and restructuring of those companies and improving a rate without having to take a tough of you on the outlook for the cyclical -- look on the

outlook for the cyclical. jonathan: jean medecin thank you for joining us. we will talk luxury. the ceo of luxottica. that is up next. ♪

>> good morning. welcome back. we are the 30 minutes into the trading day. let's ring you a picture of the markets. they missed out on the rally yesterday and they were up 32 points. we come lower after a decent day yesterday and after a rally that was 100% over the last month and we come back just a little bit in the move up 4%. let's move onto another asset class. the euro dollar is flat. sterling is flat.

the aussie doing the unthinkable. that is when the central date cuts rates and the aussie dollar is a little bit harder -- higher. the perception is the 2% cut could be a floor and it is a judgment call we have to make. 111 flat on my terminal. we have the indexes getting stock moves. >> let's see what is leading the charge and one of the big gains is ubs. we have heard from the chief financial officer and it seems to be on every single benchmark with profits up and investment banking up. you see management of and 14 billion swiss francs in terms of

what they are managing. they say that would change the pricing and try to shake things up as we see the negative yields. have provisions to of those and the biggest chipmaker in germany is up and the second quarter numbers could beat and they are looking strong at 7%-11%. they will be up more than one third and they clearly see more demand on the product. most apprise there. it is a key theme and also, the strong dollar is profitable for the third quarter numbers. it will do well with the weak euro. meanwhile one of downward trading stocks this morning is

about commodity trading and we have seen it getting out to the ground with production falling. the reason is, in argentina and, they are not as good. they are seeing a bit of a hit and they did see the uptake and production. they are a little worried about the production coming. >> thank you very much. let's keep it on stocks and luxury. the income beat the estimates yesterday and the sales came in. i am pleased to say that they join us exclusively. it was a decent first quarter.

how much of that was the foreign exchange? >> well the foreign-exchange definitely helped and we had growth in sales with the foreign exchange tailwind and above 20% growth. >> what you assume will be the bottom line? >> up until the last quarter we typically said we had the national hedge of the currency and we had about half of the costs and half of the revenue and dollar and, as we got towards the end of the year, the dollar started getting significantly ahead and i think we will see a little bit all the way through the autumn. as we analyze the strengthening of the dollar, it will probably

level out. jonathan: it would be unfair to justify the impact of the weaker euro with it being record profits. this year, we expect another record profit. >> i think we will stick to the estimates and we certainly have had a strong start. we have had a strong start not just in north america, which is half of our business. 20% of our business to get over the total revenues. europe came in and it was aggressive as we started the year. that was the estimates and it was panning out that way. a strong u.s. means a strong -- jonathan: i want to talk about the structure of management at

the moment. it has been messy with some switching isn't changing. right now, you have a structure. how does that work they today? >> it works very well. my partner is an expert in technology and production and innovation. i worked retail wholesale, and, we are a natural fit and it all exists in the company and the hierarchy. it is less laborious on the outside than it may seem on the inside. >> i want to talk about the acquisitions over the last 24 hours and the exotica. tell us about the value of the company and adding more to the

stable. do we go outside the mainstream product range? >> the acquisitions have always been part of the history. i would like to make a statement on that. on the one hand, we can reach all of our goals and, we are not forced to do acquisitions. on the other hand, we have the cash for acquisitions and we are always on the lookout. i think the priority is the brand and the brands that have infrastructure in the markets. because we expect a big chunk of our growth and market expansion to come from emerging markets. we also have acquisitions and companies that may have capability to make us a better

company. and those are the areas we are looking at. >> you say there is something to learn. are you saying there's something learn the markets that originated in east and in china? >> yes. also, companies may have technology and they may reapply to bigger brands. we are not necessarily just focused on the big acquisitions. jonathan: let's talk about the technology and a lot of it has been made with the impact on the luxury watch industry. we have the same play in eyewear. now, no one is talking about. what is the next big thing in your world, as far as technology is concerned. >> the google glass and the

first generation was, let's call it a test. it was a way for google to get feedback and they are working on the second-generation and a multiple generations. i think the challenge is to decide when they have something that is right for the next step we are working with them on the device and on the frame to make sure that it is comfortable and attractive and both things will help the experience of the next generation even better. we're working on that as we speak. jonathan: when can we expect the next duration of google glass? >> that is for them to decide and, i think they will let us know shortly when they are ready. they want to make sure the next

generation experience is right and that is more important than early. it is a question for google. jonathan: the final question is halfway through the year, you have not said it but, i think it could be another record year for profits. >> the back half, for us, is important in the u.s. and we saw a big build with the quality and lens club crafter -- in lens crafter. there will be new designs and a great experience. that is a big piece of the journey that will get in the second half and, we continue to

see great growth in emerging markets, particularly china and brazil. hand, i look forward to seeing those markets in the next generation and getting 20 percent and 30% growth. jonathan: a big thank you for joining us this morning. up next, 41 minutes into the session and equity is a little higher. the end of the full market super cycle that began in 1981. we talk about the predictions next.

jonathan: good morning. welcome back. warning investors are not impressed with the plan today. he announced a restructure and it will shift to independent owners and cuts to the rating bring it down. the department of justice has support -- has joined an investigation. the probe relates to a meeting with officials and advisers. the report is at the center of

the investigation. the total return fund has lost after two years and suffering more than $100 billion when the manager steps back. let's keep it with the bond king : the end of the bull market super cycle for stocks and bonds. he says the monetary policies have kept it alive. now, he reflects upon the market cycle consents that the bull market ends with a whimper for the banks. let's go to the fixed income asset manager who helps oversee $2 billion in assets. he made a punchy call and it is

looking good. he calls for the end of the super cycle. >> he is right and wrong. i think it is too early. the economy is weak in europe and in the u.s.. china is a big question. the global economy is still weak. talk is about the reserve behavior in the u.s. and the problem is with europe and i do not recover the exact figure. it is the monetary and the australian today. it would be very difficult for the fed to raise rates now and you saw yesterday with williams

and evidence. williams saying we must be prepared to see a raise at any meeting and he said it was too early and he is in favor of raising rates in 2016. >> i had a question about fixed incomes and i want to talk about pressure is with you. their focus less and less on the domestic economy and more and more on the world. we had a strong start to the year. are you will wish on treasuries? >> the rates are increasing and it is an opportunity, rather than a change. a european investor, it was that zero three months ago.

would you buy a u.s. treasury? it is early. a lot of investors are afraid of the fred -- the fed. >> there is a german 30 year and the flipside is it is said to make money. it could mean a lot. what is the time? >> in the coming weeks, the coming months. you see the fed and you will see it with him saying it is too early. they are more patient than ever and if you remove the patient they are more patient than

before when they were patient in the statement. jonathan: the federal reserve, for the efforts to communicate a hike, will they capitulate? >> you are a fed member and you use it and you make the qe3 and the weak growth, keeping in mind that between two thirds and three quarters of growth has you speaking about u.s. economy and the key is consumer confidence. if the confidence falls the growth target will never be reached. >> i want to bring it back to europe. i look at the german sovereign curve and you have seen a

significant move. over the last couple of weeks. how does this play out? >> yes, for me, it is volatility and it is not the market that can move. you have a lot of investors selling bonds and a lot of investors sell euro to buy other currency. and a lot of investors are afraid of europe just like germany. the problem increased and nobody can tell you about the business solution. >> the thing i discussed earlier you in the show is the technical

direction and there seems to be a flipside. you think this is a technical correction? >> bonds will stay with the volatility of the market and the treasuries will perform when investors are convinced the fed will be more dovish than anticipated. >> a fascinating discussion. a big thanks to eric. let's go to companies. i know ryan chilcote is looking at them right now. ryan: airlines lose money because not that many fly. the bigger issue is the company saying that they lost less money this year than last year and less money than they thought they were going to lose. what is the reason for that?

they are down 50% since this time last year and they have saved 200 million euros on the fuel bills last year. investors are not exactly jumping up and down. take a look at the legacy issues continuing and the low-cost service we just heard. they say pressure will continue and the downsize risk has increased. you have the labor dispute and they have been involved for a good year. you have the german wings disaster. it did not have a huge effect on the bottom line. labor is the reason the company suspended dividends and paid close to a quarter trillion in euros last year and 32 this

year. he has been a ceo for a year and he has to get it right, lowering the costs. if he gets that right he has a chance of really making a legacy for himself. obviously, this is an airline struggling to make ends meet. jonathan: thank you. this is what stocks are doing. they are playing catch-up after missing out on yesterday's rally. a busy morning ahead. i will give you the breakdown of what is coming up after the break.

jonathan: that's almost it for all the move. the european commission forecast for the european economy and the data for the u.s. at 2:45 p.m. here and blood the -- here in london. guy: if greece we've eurozone, that is the big question. we'll talk with the business of ryanair and we will talk to mike. >> unfortunately, i don't have time. guy johnson, thank you very much. the ftse 100 is trading higher

than playing catch-up after the close yesterday. that is the headline this morning. talk to me on twitter. good thought for the rest of your day.

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guy: ubs'profits almost double. best since the financial crisis. waiting for numbers said -- from hsbc. one day to go. greece has until tomorrow to make to ledger million euro imf payment. -- 200 million euro imf payment. we speak to ryanair ceo about how his airline is attracting corporate travelers. ♪